Investing Pocket Money

ossian

Hi,
I have two primary school aged children neither of whom gets pocket money yet.  The youngest is now asking, gently, about the idea of pocket money.  They both have piggy banks with over £100 of accumulated small gifts.  I am thinking that I am doing a poor job about teaching them about money (and as someone that was initially financially naive and is now savvy I am aware of the pitfalls).  So my thoughts have been turning towards starting pocket money for them (at something around £25 a month given weekly).  My suspicion is that they will not have any real outlet for the money and will be receptive to my suggestion of investing it.  I want to teach them about investment.  My youngest is more of a spender/immediate gratification type (although less so than average) and my eldest keeps all money so he can save for a house (his idea not mine).

My question is... Which provider does the best low cost equity/fund JISA that accepts sums as low as say £25 a month?  I have looked at Vanguard (ruled it out as £100 a month minimum), YouInvest, and after finding it mentioned in a search here Fidelity which looks it may do the job.  I'd consider a Junior SIPP but suspect the children will find that idea harder to buy into.

I am not keen on cash for the long term and low interest rates are probably less helpful than volatility.

Thanks,
Me x

masonic

Why not make use of one of the child regular savers, such as the Halifax 4% one, then invest the proceeds annually in a S&S JISA?

DireEmblem

masonic said:

Why not make use of one of the child regular savers, such as the Halifax 4% one, then invest the proceeds annually in a S&S JISA?

I guess given the timeframe, investing might prove more fruitful?

masonic

DireEmblem said:

masonic said:

Why not make use of one of the child regular savers, such as the Halifax 4% one, then invest the proceeds annually in a S&S JISA?

I guess given the timeframe, investing might prove more fruitful?

My suggestion IS to invest it.

Alexland

There's a difference between pocket money which the child can learn to save and spend with and longer term savings (an option given the preferable rates) or investments (which the child can also get involved with).

ossian

Alexland said:

There's a difference between pocket money which the child can learn to save and spend with and longer term savings (an option given the preferable rates) or investments (which the child can also get involved with).

My children spend very little of the money they get.  In fact the eldest never spends any as he is fixed on the idea of saving for a house.  The youngest has over £100 in his piggy bank.  This is after us putting any substantial gifts into earmarked investments in my wife's ISA.
I hadn't realised there were savings accounts that give returns that would reward a child for saving but the Halifax one above looks very appealing. 

masonic said:

Why not make use of one of the child regular savers, such as the Halifax 4% one, then invest the proceeds annually in a S&S JISA?

I think that's exactly what I'll propose to then children then perhaps transfer it into a Vanguard JISA.  Thank you.

DiggerUK

I don't see any purpose in teaching your young children about investing, in fact the thought horrifies me.
With our children we first taught them about saving up until they had enough to buy what they wanted, baby steps are  called baby steps for a good reason.
Once that was behind them then they had an account with a cash card, the concept of saving in an account really was a short step from a pocket money pot.

Stop being so dammed serious, lighten up..._

IvanOpinion

Just make sure that you also teach them to enjoy their rewards.  When I was a kid we were expected to save one-third, spend one-third and keep the other one-third for special events (e.g. holidays, Christmas, birthdays or stuff I was explicitly saving for like a new fishing rod or tackle box etc.)

webnibbler

Agree with DiggerUK and keep it light for the younger kids. I give my primary school aged daughter pocket money which I encourage her to save at least for a few weeks before spending it. Just learning the lesson of not buying something now and saving for something better later is worth learning at this age.

Later I'm planning to introduce the idea of no physical money with a payment card. Something like nimbl which will introduce her to the idea of money transactions you can't see. Managing money you can't see is a skill which I think even evades adults.